BNP Paribas launches Low Carbon UCITS ETF
BNP Paribas Asset Management (BNPP AM) has launched BNP Paribas Easy Low Carbon 300 World PAB UCITS ETF, a thematic listed index fund offering savers an investment solution to reduce the carbon footprint of their portfolio, aligned with the goals of the Paris agreement.
A pioneer in low carbon ETFs, in 2008 BNPP AM launched its first such fund, now with AUM of EUR860 million, on a European equity index. The launch of BNP Paribas Easy Low Carbon 300 World PAB UCITS ETF continues BNPP AM’s long-standing commitment to a low carbon economy.
Benefiting from expanded global exposure, this new ETF, which listed on Euronext Paris and Deutsche Börse Xetra on 29 June, replicates the Low Carbon 300 World PAB index. Administered by Euronext, the index consists of 300 best-in-class international companies, notably industry leaders in reducing CO₂ emissions. Among the 300 index constituents is a 15 per cent allocation to ‘green’ companies, selected by a committee of experts, which generate at least half of their revenue from renewable energy or the development of low carbon technologies.
The index is in line with the Paris Aligned Benchmark (PAB), as well as the goals of the Paris Agreement, which aim to limit global warming to 1.5C by 2050. These standards apply strict exclusion requirements for fossil fuels (coal, oil, natural gas) and include reducing the carbon intensity of the index by at least 50 per cent relative to its initial investment universe, as well as a portfolio decarbonisation target of at least 7 per cent per year. The PAB index also provides for a carbon footprint measurement based on Scope 1, 2 and 3 emissions, thereby taking into account both direct and indirect emissions. Given its specific sustainable objective, this ETF is classified as Article 9 according to the Sustainable Finance Disclosure Regulation (SFDR).
Isabelle Bourcier, Head of Quantitative & Index Management at BNPP AM, says: “The increasing awareness of climate issues among savers, coupled with regulatory changes, is generating high expectations on their part, which is why we have chosen to expand the geographical exposure of our low carbon index offering internationally. With the launch of this ETF, BNPP AM is affirming its leadership in thematic index solutions, and is expanding its range, which already includes index funds and ETFs on the themes of the circular economy (2019), blue economy (2020) and ESG infrastructure (2020).”